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tv   Treasury Secretary Mnuchin Testifies on Presidents 2020 Budget Request  CSPAN  March 14, 2019 3:48pm-5:13pm EDT

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removal of those funds. and, second, yeah, we intend to use every means we can to not allow the president to shift money around when he's not allowed to. now, he's shown so little respect for the fences and laws and rules that we've had in this country that we got to be real careful and whether it's legislatively or in court fight him every step of the way. ok. thank you, everybody. have a nice day. yes, have a nice week and a half. >> and now back to coverage of house ways and means committee hearing with treasury secretary steve mnuchin. >> growth in the economy and we have not seen that yet. mr. secretary, i want to move on. the 1998 i.r.s. restructuring act created 10 violations that result in the termination of an i.r.s. employee. the seventh violation is willful misuse of section 6103 for the purpose of concealing data from a congressional inquiry. this is defined by the treasury
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inspector general of tax administration, and i'm quoting here, as, quote, actual knowledge that section 6103 did not preclude access to information by congress or reckless disregard of the statutory provisions for disclosing information in response to a congressional inquiry, end quote. thus, an i.r.s. employee that misuses 6103 to obstruct a congressional inquiry can be fired. mr. secretary, should this apply to treasury employees as well? secretary mnuchin: there is an awful lot of interest in 6103 here today. ms. sanchez: an i.r.s. can be fired for not providing information under congressional inquiry. don't you think a treasury employee should as well? secretary mnuchin: you are asking me a hypothetical question which we will review with our lawyers. mr. neal: the president did note 6% growth. i will recognize the gentleman
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from new york to inquire, mr. higgins. mr. higgins: mr. secretary, i just want to for the record correct you that tax cuts do not pay for themselves. and you should know that. the president just gave us four consecutive trillion-dollar deficits, proving that these tax cuts do not pay for themselves. the president's own budget projects that the debt will hit $22.8 trillion in six years. that's more than 50% higher than when the president took office. so these tax cuts do not pay for themselves. candidate trump said that he will save medicare, medicaid, and social security without cuts, ever. he further said, i'm not going to cut medicaid or medicare. president trump's budget, because these tax cuts don't pay for themselves, cuts , cuts by $845 billion
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dicaid by $241 billion, cuts social security by $25 billion. the president gave us an infrastructure bill that nobody took seriously. he had a republican house and a republican senate and there wasn't one bill to support the president's bill -- plan toward implementing an infrastructure bill. in fact, the president built this as a $1.5 trillion infrastructure plan with only $200 billion of federal money. that is equivalent to the amount of money that we spent rebuilding the roads and bridges over the last 10 years in iraq, afghanistan. so this is not an infrastructure bill. my hope is that given the failed attempt by the president to initiate an infrastructure bill that the administration will work with this house that has sound ideas as to how to
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fund properly an infrastructure bill because, mr. secretary, unlike tax cuts, infrastructure does pay for itself. for every dollar you give away in a corporate tax cut, the best-case scenario is you can recapture 32 cents. you're an investment banker. that's a loss on investment of 68% on infrastructure, conservative. for every dollar you spend you can recapture about $2, and i've seen $3, $4 as well. my hope is you will take seriously our offer to work together on an infrastructure bill. secretary mnuchin: mr. higgins, i can assure you we will take seriously your efforts to work with us on infrastructure. we look forward to that. again, let me just comment on whether the tax cuts pay for themselves or not will be simple math. 35 basis points of additional growth over the 10-year period is what it takes. we're way ahead of that but we'll see so time will tell.
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mr. higgins: i yield back. thank you. mr. neal: i thank the gentleman. with that let me recognize the gentleman from missouri, mr. smith, to inquire. mr. smith: thank you, mr. chairman. mr. secretary, thank you for being here. listening to the questions i heard, i might should ask a cup that are just as ridiculous like, do you breathe oxygen? secretary mnuchin: what was that? mr. smith: do you breathe oxygen? secretary mnuchin: yes. mr. smith: are you a u.s. citizen? secretary mnuchin: yes, i am. mr. smith: that's how ridiculous these questions will be today. everyone knows these questions but they are just trying to make their political points. what i do want to say to you, mr. secretary, is thank you. thank you and president trump and this republican congress for turning our economy around. for the first time in 13 years our g.d.p. is at 3.1% last year. that's amazing. and when i go to southeast
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missouri, where the folks i represent, their median income is $40,000 a year and they tell me about how they have benefited from the tax cuts and jobs act. i don't listen to this political debate and jargon saying that it only helps the wealthy because i can take you to countless individuals in southeast missouri where they came up to me and they're like, you tell president trump thank you for my $1,000 bonus that i got at the at&t call center in missouri because of his tax cuts bill. i said, no, i helped write it. the president didn't write it. i was one of the 23. he was like, thank you. or the young lady who had two broken car seats at lowe's in raleigh, missouri, and she said, because of the benefits from the tax cuts and jobs act, i was able to buy new car seats. o i want you to not have a doubt how successful the economy is going and how well
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the tax cuts and jobs act are affecting real americans who don't think $1,000 are crumbs. they know it's a couple months' rent. they know it's a couple car payments. and they know it will put food on the table. so, mr. secretary, i do want to make a point that's in the budget of something that i really care about. one, the elimination of the electric tax credit. the president proposed that in the budget. we know that 80% of the people that benefit from the electric tax credit for electric cars, they get $7,500 on the purchase of a new car. 80% of those people make more than $100,000 a year. how many electric cars do you think are in southeast missouri? secretary mnuchin: i don't know how many are there but i do know that i own a tesla and i didn't need the $7,500 tax credit. mr. smith: well, i want to take it away and i'm glad the president does as well. i could say so much more but
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thank you for being here. thank you for the job you're doing and thanks for putting up with all this. mr. neal: we thank the gentleman. with that let me recognize the gentlelady from washington state, ms. delbene, to inquire. ms. delbene: thank you, mr. chairman. thank you, mr. secretary, for being with us today. when the tax cuts and jobs act was being drafted, republicans sold the pass-through deduction as a provision that would benefit small businesses. however, recent joint committee on tax publication on the pass-through deduction found that 2/3 of the benefit goes to households making above the income threshold. $157,500 for is individual filers and $315,000 for joint returns. meaning that taxpayers above those income thresholds who only represent 5% of taxpayers claiming the deduction will reap 66% of the benefits from
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the deduction. another report from the joint committee on taxation finds that more than half the benefit of the pass-through deduction will be claimed by taxpayers with income in the top 1%. are you concerned that a provision that was supposed to benefit small businesses is largely benefiting the wealthy? secretary mnuchin: well, let me just comment that in pass-throughs, there is one level of taxation as opposed to two levels of taxation. the idea of the pass-through discount was to create businesses that are pass-throughs to make them competitive with corporations. and to eliminate a lot of what would have been the switching cost had people made those as corporations. ms. delbene: our small businesses are not receiving that benefit. secretary mnuchin: again, what i would just say, i don't have the specifics and we'll try to get back to you on this, but the idea was that no different than corporations would pass on significant part of those
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benefits to workers and investment that pass-throughs would as well. we'll get back to you with some statistics. ms. delbene: you should read the report from the joint committee on taxation because they have that detail. secretary mnuchin: i read the report. ms. delbene: when the tax bill was -- when republicans were talking about the tax bill they talked about how it would benefit middle-class families and small businesses. this is yet another proof point that says that has not been true. finally, mr. chairman, i'd like to enter in the record a letter sent to secretary mnuchin on november 29, 2018, requesting documents related to the a.c.a. the documents have not been produced to the committee. i ask for unanimous consent to enter it into the record. mr. neal: without objection. secretary mnuchin: we'll look into that and get about a to you. i am not aware why it has not been followed up on. mr. neal: i thank the gentlelady. with that we'll recognize the gentlelady from california, ms. chu, to inquire. ms. chu: secretary mnuchin, earlier mr. marchant from texas from the other side of the aisle raised the issue of
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taxpayers facing a penalty because they did not withhold enough. i'm so glad he did because it shows that this is not a partisan issue. and i'd like to reiterate as to why this is so important. the 2017 tax law was the first law overhauling this country and its taxpayers the first in 30 years. because of the sweeping changes made in a very short period of time, including the elimination of personal exemptions and capping of the state and local tax deduction, many are still working to understand its impact on their families and on their tax refunds. constituents in my district have told me this is the first year in decades that they have not received a refund and are facing the reality of owing taxes and underpayment penalties. now, the last time the tax code was overhauled in 1986, the drafters included a waiver of penalties for underpayments caused by the change in the tax law. i believe this provision was included because they knew
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taxpayers would face the same withholding challenges that families are facing today. while congress did not i understand that the i.r.s. did announce it will waive the usual underpayment penalties as long as taxpayers paid at least 85% of the tax they owe. this is a step in the right direction. but it's ultimately inadequate. since that announcement, experts and practitioners believe further relief is needed. in fact, the american institute of c.p.a.'s, a nonpartisan organization that represents over 430,000 accountants and experts across the country, have determined that further relief is needed to protect the taxpayers this filing season and would like it to be lowered to 80%. that's why i introduced h.r. 1300, the taxpayer penalty protection act, which follows this recommendation to the 80% level.
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thinkable bill is in the best interest of taxpayers across the country and this shouldn't be a bipartisan issue -- a partisan issue. i heard you say earlier to mr. marchand that you would consider providing further penalty relief through administrative actions. my question is about that and also about the time schedule because people are filing now and we have only onement to go before april 15. taxpayers need the certainty now. will you confirm you'll consider further penalty relief and what's the time frame? mr. mnuchin: i appreciate your feedback. this isn't a partisan issue. as it was brought up earlier, i appreciate you bringing it up wlefment review it very quickly. i would tell you i'd review it this afternoon but i'm testifying at the senate this afternoon. so i'll look at it tomorrow and we will try to make a decision within next week on this. >> the chair will recognize mr.
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rice from south carolina. ms. rice: thank you, madam chairlady. thank you, secretary, for being here. miss rice: i -- rice i want to tell you -- miss rice: i want to tell you a store -- mr. rice: i want to tell you a story. when president obama was campaigning for president, he stopped at a county in my district and it's one of the poorest areas in south carolina. they call it the corridor of shame. they were very heavily invested in tobacco 40 years ago and you can imagine what happened to them. when the president stopped there, he put a little girl on his knee and decried the poverty and that we needed to do something. it was a beautiful speech. but nothing happened in the eight years of his presidency. i want to tell you that marion county right next to that is the poorest county in south carolina. 57% african-american, 28% live in poverty, twice the south carolina average. this is a real story for real people.
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when president obama left noffs december, 2016, -- left office in december, 2016, 9.6% unemployment in marion county. 18 months later, a year and a half after president trump took office, and we had passed this tax cuts in jobs act, and we had the -- and jobs act, and we had the opportunity zones and a new piece of infrastructure in dylan county, the unemployment rate in marion county dropped from 9.6% to 4.8%. that's half. half in 18 months. that is a remarkable success. for people who desperately, desperately needed it. at this point, we have more jobs open than we have people to take them. people who have suffered generational poverty who never believed that this land of opportunity provided opportunity for them now are coming back into the work force. and everyone who does is a win.
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they recognize, they're recognizing that they have a chance at the american dream. we're engaging education the -- educators and pastors to bring people together to help them see that opportunity is for them. barack obama gave a great speech, donald trump is fixing the problem. thank you, mr. secretary. now, we can't stay where we are. i believe that the reason why american workers suffered for so long is because our economy, our economic policies, were not competitive. we've made our tax code competitive. we've got to fix our unbalanced trade agreements that are balanced against american workers. please keep pushing for the revised nafta and our new deal with china. we need infrastructure. our workers, if they're going to compete on the world stage, they've got to have world class infrastructure. and we need to shift from family-based to skill-based immigration. if we can get these things done,
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we will see upward movement and g.d.p. growth for sustained period and a sustained golden age of opportunity for american workers. thank you, mr. secretary. >> the chair now recognizes myself for three minutes. for questioning. mr. secretary, i wanted to follow up on the line of questioning regarding the opportunity zones. i think that we're all agreed that it presents a wonderful opportunity for us to invest in distressed communities. mr. kelly asked about the second trauverage of rules and -- traunch of rules and regulations. you didn't give a specific time frame. i wobbledered if you could give us a thought on when we could get finalized rules. ms. sewell: there are several opportunity zones in my district that we'd love to take advantage of, but many of the private investors want to know specifically how they're going to -- how opportunity zones -- the credits will actually benefit them.
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so can you talk a little bit about when we can get final rules so that people could have more specificity? mr. mnuchin: first of all, thank you for your focus on this. and i can assure you i am as focused -- focused on this as you. i ask my team every day, where are they? as i said, the next traverage is going through a review -- traunch is going through a review. i hope thanks matter of weeks we can get this out. ms. sewell: i want to stress, i think this is a tremendous bipartisan opportunity to really affect communities, vulnerable communities in our nation and people really want more specifics before they actually invest. mr. mnuchin: thank you very much. i can assure you this is on the top of my list when we have tax meetings every day. ms. sewell: the other thing is i know that in january my colleagues and i sent a bipartisan, bicameral letter raising a number of issues about the opportunity zones, programs that remain unsettled. one was about data accountability. that was addressed a little bit
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by mr. kind and your response. i want to make sure that the focus is on having matrix that will actually get to whether or not communities, those communities actually benefited. the impact of the investment on the communities. in particular, unemployment. ut also the ancillary things that actually can spawn from economic development. i will work with my colleague, mr. kind, in helping to draft a letter of the kinds of matrix and the kinds of data accountability i think that would be necessary in order to make this really a win-win for the community as well as for the investors. mr. mnuchin: good. let me assure you that the only reason why those haven't come out is because we didn't want to rush through them. we want to have the proper reporting. and those aren't critical for people starting investments. so whether those come out next week or -- ms. sewell: sure. you know how investors are. mr. mnuchin: we'll work with you very closely.
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thank you. ms. sewell: the other question i've been had that's been asked of me, is there an opportunity to examine whether or not we can do additional designations? since the governors had to designate prior to actually the rules coming out, has there been any thought as to whether or not additional areas could be designated? mr. mnuchin: we don't believe we have any league authority to -- legal authority to allow for additional designations at this time but if that's something that is important, we would work with you and the committee to pass appropriate legislation and be supportive of that. ms. sewell: thank you. the next -- we'll go to mr. schweikert of arizona. mr. schweikert: thank you, madam chairwoman. i appreciate, just because having to run back and forth and vote on the floor. i want to run through just a couple of things. first, opportunity zones. this is as much for the staff, for those who from arizona, with our tribal communities, you can't end up with having ownership of the underlying land. so you have the lease hold interest it. does make some of the mechanisms
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a little trickier. maybe having to use tax book bases. so i appreciate you listening to our concerns on that. thank you for hopefully moving us away from the bad old days of what we used to refer to around here aspiration choke point. for some of my border communities, you had a hispanic surname, you fult you were being treated -- you felt you were being treated differently if you were doing trade back and forth across the border. debt management. there's a number of us who, we basically look at our demographics and that's one of the frustrations you hear in these discussion here. if you go 2008 to 2028, 91% of all the spending increases are going to be interest, social security, health care entitlements. it's our demographics that are driving our debt. if you actually look in the next 30 years, i hope the treasury is thinking of other also instruments, the concept from dr. shuler, some of these other things as ways to manage our
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future debt that's being driven. many of us get a little nervous when we look at the subscription rates of some of the sovereign offerings. last thing, and this is where the questions sort of -- question sort of comes, c.b.o. actually put out the five-month, you know, the first five-month fiscal revenues in. and it looked as if actual revenues were pretty much identical to the previous fiscal years' first five months. but the $142 billion of debt looks like it almost solely came rom our bipartisan budget act. when treasury's doing some of their documents, do they have the -- is there a morell gantt way to sort of say, look, rev -- more elegant way to say, look, revenues look stable, it's congress' spending policies that are actually driving up your need to go and issue more and more debt?
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mr. mnuchin: thank you. let me just comment. the way we designed the tax act was there were incentives for people to do automatic expensing and other things, which cost tax revenues in the first few years and raised revenues going forward. so when we say it's paid for -- it's paid for itself or it's generated rev use in, that's true, despite -- revenue, that's true, because we're looking at it over the weekend -- window. we can't spend the growth twice. so growth that we're using to pay for tax cuts, we got to be careful and not also use for increase in expenses. and that's the reason why we've adjusted the budgets accordingly. mr. schweikert: thank you, mr. chairman. >> thank you. let me recognize the gentleman from pennsylvania, mr. evans, to inquire. mr. evans: thank you, mr. chairman. mr. secretary, you mentioned, you talked about the word of poverty and that's been a huge concern obviously in the state of pennsylvania, particularly in
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the city of philadelphia. i want to raise the question about utilizing low-income housing tax credits and private activity bonds to fund low-income housing. i'd like to know your thoughts on fixing the low-income housing tax credit at 4% while either removing the cap from private activity bonds or havinga expired cap funds go back into the pool. mr. mnuchin: i'd be happy to follow up with you in your office to go through the specifics and your ideas of what we should do on that. we'd be open-minded to looking at your suggestions. mr. evans: second question, i want to kind of follow up a little bit on the issue regarding opportunity zones. obviously that is a great concept. however, it appears that, although well-intended, wealthy investors often benefit the most because benefits are limited to capital gains. investors are not always focused on the best use.
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so how can we make it so that we can see more benefits targeted toy -- targeted to the areas which were originally intended to benefit opportunity zones? mr. mnuchin: i think as i said before, we're very excited about opportunity zones and particularly areas where we think there's going to be a lot of interest, not only in real estate, but more importantly, companies starting and companies growing in those areas. so we look forward to working with you on appropriate areas in your area. but we think there will be a lot of money that's incentivized and we look forward to working with you. mr. evans: would you also see around the issue of the opportunity zones being able to have a direct benefit towards housing in any way? mr. mnuchin: i think that housing is a very appropriate rea that will benefit from it. mr. evans: you also talked about the element of mentioning the aspect of poverty, which i totally agree that we need to do
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so. i think that is absolutely the challenge that we face in this country. so like the two tiers of communities that we have. so i want you to go back a little bit in a very specific way, from this administration. you mentioned the tax package, you mentioned trade. any other kind of specific ways that you have, specifically on addressing the question around poverty? mr. mnuchin: i think within treasury, we're looking at a lot of issues around financial literacy, opportunities within communities. we have different advisory groups. yesterday i met with many people on this issue. we look forward to working with you and getting your ideas and how we can address it. it's a very important issue. we also think that manging -- making sure within these communities we address the appropriate regulation. and the appropriate opportunity for job creation. mr. evans: thank you, mr. chairman.
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>> with that, as the gentlelady takes her seat, we would recognize ms. moore from wisconsin. to inquire. ms. moore: thank you so much, mr. chairman. and welcome back, secretary mnuchin. i just wanted to make sure that i heard your testimony correctly. you say that this tax cut has really put families on a great path. we've doubled the standard eduction that businesses are creating new jobs and there's been great economic growth. is that your testimony? mr. mnuchin: i believe that's correct. ms. moore: all right. well, i just want to ask unanimous consent to enter into the record some of the media stories compiled by the americans for tax fairness. and do -- can i -- >> without objection, those will be offered into the record. ms. moore: thank you so much.
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secretary mnuchin, imim-- i am wondering, we've doubled the standard deduction, you know, your claims is that families are going to be better off. but you mentioned in your testimony that the budget is going to continue to push our economy forward. ini'm wondering how the cuts medicaid, medicare, cuts in social security to disabled people who are trying to work, the elimination of the social services block grant fund, huge cuts, how will the doubling the standard deduction eliminate -- deduction, eliminating medicaid expansion, how will a struggling family of taxpayers benefit with a combination of the tax cut which gave them double the standard deduction and the elimination of the these other safety net initiatives? how do you see that working with
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your theory of families being better off? mr. mnuchin: i think families are better off because of the tax cuts. they have more money in their pockets. ms. moore: we -- [talking simultaneously] mr. mnuchin: can i at least finish? ms. moore: we have tax benefits of $20 extra. mr. mnuchin: the example i gave before and everybody is different. is in a family that makes $75,000 had their taxes cut 55%. i believe the average tax across the board was lower than that. ms. moore: reclaiming my time, sir. i'm not talking about a family making $75,000 a year. i want to talk about the families that are struggling in the middle class, how does cutting these other benefits they might need obamacare, how will they benefit from this tax cut? mr. mnuchin: i'm going to respect your reclaiming your time because the last time i got into a video on that. ms. moore: that's exactly right.
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[laughter] that's how it started. mr. mnuchin: let me just emphasize, we are not cutting programs. we are lowering the rate of growth on programs. ms. moore: you're cutting social security, medicare, medicaid. you're eliminating the social services block grant fund. thank god my time has concluded, right? secretary? you didn't have to answer. ok. >> i thank the gentlelady with that, let me recognize the gentleman from illinois, mr. lahood, to inquire. mr. lahood: thank you, mr. chairman. thank you, mr. secretary, for being here. and for your service to our country. i just want to say, i didn't mean to say yes -- just -- mr. secretary, appreciate you being here. i would just start off and in my district in central and west central illinois, i look at the affect that the tax cuts and jobs act has had on my district. and probably the number one complaint that i hear in my district is i -- as i travel
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around is we don't have enough workers to fill the jobs. we have 7.3 million unfilled jobs in this country. i look at my district and whether it's truck drivers, whether it's mechanics, whether it's welders, whether it's nurses, technicians, we can't fill the jobs that we have as a direct result of the tax cut and jobs act that was passed by this congress. and that's a positive thing. i also look at recent gallup poll, u.s. small business owners' optimism the highest in 10 years. look at the fact, a gallup poll just last month, in the middle class, 70% or more -- are more optimistic this year than they were last year. so by every measure, you look at the optimism and the economy as a result of the jobs -- the tax cut and jobs act, it's working. question for you on filling that jobs gap out there. skilled labor. career technical education. can you talk a little bit about
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what the administration is looking at so that we can fill these jobs and educate folks for -- so that we can keep this economy moving? mr. mnuchin: thank you. i think there's really two important issues. one is worker training and to make sure that, as you said, there's as many open jobs as there are workers. so that we train people for those jobs. two, we need to have legal immigration growth to increase our economy. so i know this is something that the president continues to be focused on and working with congress on. but we need more workers. mr. lahood: switching gears to trade. can you give us a little update on where we're at with china? i know you and ambassador light hughesen have been en-- lighthizer have been very engaged with the chinese and we're at a critical point with those negotiations. specifically, if you could comment on -- we've heard a lot about the enforcement meckfism that we are trying to put in place -- mechanism that we are trying to put in place to change the behavior of china in terms
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of making them comply and abide by what other industrialized country in the world does. and whatever that structural change is is going to be important moving forward. can you talk a little bit about that? mr. mnuchin: i think, as you know, president trump has been focused on this issue of trade with china for the last two years, since the first meeting at mar-a-lago between the two presidents. he made very clear and they agreed that the trade deficit had to be reduced and that they had to create more opportunities for u.s. companies and protect our technology. nd stop forced joint ventures. ambassador lighthizer and i have worked very close together. we had a call with the vice premier as recent as last night. we are working diligently. there's over 150-page document that we're working on. it will have, if we reach an agreement, a very clear enforcement provision. and as the president said yesterday we want to get the agreement right. that's more important than the exact timing. but i expect it's something we'll resolve in the near future.
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>> i thank the gentleman. with that, let me recognize the gentleman from virginia, mr. beyer, to inquire. mr. beyer: thank you very much. mr. secretary, please, thank you for being with us. mr. chairman, without objection, i'd like to offer for the record an article from this morning's "wall street journal," entitled steve wynnm met with treasury officials on opportunity zones after stock sale. >> without objection. mr. beyer: and requests about these meetings have been pending since last september, the treasury secretary, and urge the treasure secretary to make these requests a priority. secretary mnuchin in contrast to the rest of the nondefense budget, the president president's budget requests an increase in funding for the i.r.s. this signals a recognition of the problem but doesn't go nearly far enough to address a decade of underfunding on the i.r.s. work force and its mission. much of the fund something addressed on new initiatives like the technology that while although worthy don't address some of the main problems we've seen arise during a decade of underfunding. during the i.r.s. enforcement budget 23rks% below where it
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was in 2010. in 2010 there was a tax gap of almost half a trillion dollars. we talked a lot about the budget deficit that half a trillion dollars per year would go a long way. and that's just 2010 numbers. from 2011 to 2017, audits of the wealthy fell an alarming 75%. a much higher rate than the auditses for poor middle class taxpayers. this comes when wealthy taxi vaders are using ever more complex schemes. the i.r.s. has many talented and dedicated employees, but they simply can't keep up. and there's concrete evidence that the wealthy enjoy widespread immunity. not just to practice aggressive tax avoidance schemes, but to engage in fraud and evasion as well. some wealthy people clearly share the belief that that's why tax deductible donations are fraudulent chairities, bribes to get their kids into college or undervaluing real estate assets. this not only undermines federal
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revenues but also the confidence in our democracy and the rule of law. mr. secretary, what steps are you taking to reduce the tax gap and increase public confidence in the i.r.s.? mr. mnuchin: thank you very much. first let me comment on mr. wynn. we will be happy to follow up with the foyer request. i can confirm there was a meeting with the experts who deal with opportunity zones. we have meetings with lots of people. i think i stopped in for literally two minutes to say hello. that was not a meeting that was scheduled with me. but i can assure you this was a normal meeting like we meet with other people. [talking simultaneously] in regards to the i.r.s. funding, i appreciate appreciate a major priority for -- very much appreciate, a major priority for me is tech nothing and upgrading technology -- technology and upgrading technology. we had an issue this year on tax days with -- day with the technology. we make big investments in lots of other things that are important to the government. the i.r.s. needs technology to bring it into the modern age.
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and compliance in shrinking the tax gap in my opinion, updated technology is the number one way for us to accomplish that. so i very much support the i.r.s.'s plan. i appreciate the bipartisan support for the i.r.s. and, again, i.r.s. technology is on my top 10 list to get done. >> i thank the gentleman. with that, let me recognize the gentleman from illinois, mr. snyder, to inquire. mr. schneider: thank you, mr. chairman, for holding this hearing. thank you to the secretary for being here. i'd like to focus on a topic we've touched on already, state and local tax deduction, the cap on that. the last tax package, put a cap at $10,000. we had an earlier discussion of does that effect middle class families? in my state, illinois, it does effect middle class families. in my district, roughly 42% of all tax filers are impacted by this. and the average in lake county, one of the counties i represent, is more than $18,000 in state
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and local taxes because lake unty has a reputation of comparatively high property taxes. this is affecting working middle class families who are struggling to make ends meet. i take -- -- i would take it a step further and say it's a double taxation. they're being taxed on the taxes they're already paying to fund their schools, their local communities, the operations of our state. 11 million households nationwide are affected by this. in illinois this is a disproportion -- disproportionate impact. i hear from constituents that this is having a harmful effect on their ability to make ends meet. and take care of their families. so my question for you is basically this. what do you say to these middle class families who were promised a tax break by the president but who are in fact experiencing a tax increase, a reduction in their refunds, etc.? mr. mnuchin: first of all, let me acknowledge, ok, we are
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carefully looking at the impact on salt on the appropriate states as to what the impact is on these economies. because these economies are a large component of u.s. growth. so it is something that we are monitoring carefully. i won't get into a debate as to what's the middle class and what -- who's exactly being impacted. but i will acknowledge we have certain concerns we're monitoring on these economies. the president has made some recent comments on this that he's aware of it. so i want to say we do understand it and we look forward to working with you specifically to understand the impact in your areas. mr. schneider: thank you. a young family that is making say $75,000 to $120125,000, which defines a -- $125,000, which defines a big portion of my district, families that are -- couples that are starting their families, moving to the district, buying their first home, and getting hit with not just the impact of the cost of
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starting a family, but then a double tax on their state and local taxes they're paying for funding their kids' schools, is a real burden on these families. so i look forward to working with you. this is something that i think we need to address and give relief to these families that were promised a tax break. with that, i yield back. >> thank you. the chair would exercise a prerogative here to -- i think the president did note that he was open to a discussion about the salt deduction. mr. mnuchin: i will comment, yes. i was just referring to the president is aware of this and as i said, we're carefully monitoring the impact on these parts of the economy, which i want to acknowledge, is a very important part of the u.s. economy. >> i thank the gentleman. with, that dr. westoff is recognized to inquire. mr. westmoreland: thank you, mr. chairman, thank you, mr. -- mr. westoff: thank you, mr. chairman. thank you, mr. secretary, for being here. in my district there's a lot more optimism than we had a couple of years ago. and we're also seeing a great
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increase in the capabilities and needs being filled through our community colleges and our vocational schools. you know, through this process, we are a great country that provides safety nets. we never want to let those go away. but they're sometimes very challenging for people. we have an opportunity with growth and more jobs available, enhancing the lives of blue collar workers and their families. but in addition, i want to take a moment here to talk about these are in poverty and the opportunities for them. mr. owens: and one of the things -- mr. wenstrup: and one of the things i'm finding and i want to hear what the treasury department feels about this, and how we can do things better, but for those that find themselves in poverty, our fellow americans that are making every effort they can, one of the problems that they find all the time is they have to go one place for their housing, another place for their nutrition, and another place for their health care and
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too often, as they start to succeed, and make their way, they're personalize -- penalized. they're penalized for making too much. they suddenly get into a higher level of income and their kids lose their medicaid. that's a real scenario that i think both sides of the aisle recognize, at least i hope they do. but how is that affecting you at treasury and maybe what recommendations might you make that we do so that people aren't stymied in the process of trying to come out of poverty? mr. mnuchin: i think you raised some very important issues. i look forward to sitting down with you and other people on a bipartisan basis on the committee to look at this issue. i think clearly we want to have incentives for people to work. so we want to put people back to work. the best way to get them out of poverty is to have them have jobs and we look forward to addressing some of the issues that you've raised. mr. wenstrup: i'm talking about americans that are very incentivized to work and they
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are working and they're giving a -- given a greater opportunity at work but they can't take it because of what we have in place here, of what we're telling them is, well, now your kids will no longer have health care, because you're going to make $5 an hour more or something like that. i think we have to do some math here. mr. mnuchin: i understand it. i hope this is something that republicans and democrats can look at together on the committee. mr. wenstrup: i want to applause the focus on customer service with the i.r.s. i think that -- i met with the commissioner the other day and i think that he gets it. and hopefully we're going to be on the right track there. thank you. mr. mnuchin: and thank you for noting that. let me just say, we can always do better. one of the things we're focused, again, with technology, is automated callbacks. there's no reason why in this day and age hardworking americans need to stay on the phone on hold for long periods of time. so this is a priority for us with technology. mr. neal: i thank the gentleman. with, that let me recognize the gentleman from new york, mr. sowsy, to inquire.
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sowssows thank you, mr. chairman, thank you, -- susesuse hank you, mr. chairman, -- mr. souzzi: thank you, mr. chairman. the salt cap is bad for my district, for all of new york, at least down state new york. every democrat and every republican in new york city,ing on long island and the down state suburbs, voted against the tax bill because it's bad for the people in the area i represent. you're in, from -- you're from new york as well, is that correct? mr. mnuchin: that's correct. i hear it from plenty of people in new york. mr. souzzi: you know new york is the largest net donor of any state. we send more than $36 billion, maybes much as $48 billion a year to the federal government than we get back in tax returns. are you aware of that fact? mr. mnuchin: i am. although i would comment on the net donor issue it. also has a predominant portion of the wealthy people. mr. souzzi: and we're subsidizing the most. we have pliddle -- middle class people. the country is different from place to place. you'd argue that, wouldn't you?
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mr. mnuchin: i would. let me acknowledge, i appreciate the issue, the salt issue, as i've said. mr. souzzi: if somebody is making $150,000 in some places in the country they're doing great fwufment they're making $150,000 in my district, your facing a tough time -- you're facing a tough time because of the high cost of your home value, because of the high cost of your property taxes, cost of living. you understand that based upon your personal experience, don't you? mr. mnuchin: i do indeed. mr. souzzi: we have to try and address. that mr. secretary, -- that. mr. secretary, in june of last year, you said the new postcard-sized form 1040 is designed to simplify and expedite filing tax returns, providing much-needed relief to hardworking taxpayers. this is a copy of the postcard that was used for a lot of the press, that the republicans and the administration were using saying how much easier it was going to be for people. now, we've asked for a report, the staff of the ways and means has asked for a report that's been issued about how well the postcard's working out. we haven't been able to get that report. do you think we can get that report from you? mr. mnuchin: i understand from
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my staff that we sent you back a response yesterday. mr. souzzi: response with the comments. we want the actual report. can we get that report? mr. mnuchin: i'm aware that you want the report. we are getting the report to you. quickly. the report is in draft. our preference would be to wait until -- mr. souzzi: we'd like to see the draft of the report. mr. mnuchin: i believe that we are accommodating that. we're working with the chairman on that. i understand the request. mr. souzzi: let me point out, mr. secretary. thank you so much. nita olson, the national taxpayer advocate, gave testimony a week or two ago and said there's a 200% increase, a 200% increase in the errors that taxpayers are filing. are you aware of that? mr. mnuchin: i'm not aware of that statistic. mr. souzzi: this is an independent person who has been working for 18 years as an independent person. she says there's a 200% increase in the errors in taxpayers' forms. mr. mnuchin: i understand who she is and i look forward to hearing -- mr. souzzi: she also testified that people have to wait 17 minutes before someone picks up
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the phone and only 18% of taxpayers' calls are actually and he. are you aware of that snact mr. mnuchin: i am. as i just noted, ok, i want to work on the issue. again, we should have ways that taxpayers can communicate electronically so they don't have to sit on the phone. mr. souzzi: the i.r.s. has been picked on for many, many years. it's been getting worse. mr. neal: the gentleman will wind down his comments. i thank the gentleman. his time is expired. with, that we'll recognize -- -- recognize the gentleman from california, mr. panetta. mr. panetta: thank you, mr. chairman. mr. secretary, thank you for being here. appreciate your time and patience. wanted to -- i was going to talk about this, but you brought it up. i really appreciate you bringing this up. immigration reform. basically immigration and how that is a crucial part of the economy. we're going to -- it's very important in my district, on the central coast of california, i have a number one industry is agriculture. therefore an ag-labor bill will be coming to the administration hopefully. it's going to come out of the
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house, hopefully get through the senate. and i would hope that because of the importance that you just stressed on immigration and immigration reform, that you would be an advocate to outweigh the anti-immigration reform element in this administration, showing the president how important it is not just for my district, but for districts across this country. can i get your commitment to being that advocate for that type of immigration reform? mr. mnuchin: i don't know the specifics of the bill. but i am an advocate for legal immigration reform. i think the president very much supports agriculture and the hardworking farmers. i'm familiar with your district. and this is an issue we need to address, not only for farmers, but for skilled people as well. there's way too many people that come here, study in the u.s., get ph.d.'s, can't stay here to work. so legal immigration reform is something i think is very important for congress to work n.
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mr. panetta: exactly. i would mention that a lot of the work that my farmers do on the west coast is called skilled labor. there's a reason why the domestic work force is not filling those jobs. because it's very difficult to do. and therefore that's why we have people coming into this country to do it, nafully for my community, -- thankfully for my community, our economy and our agriculture. want to mention something in regards to the budget that came out just a couple days ago. part of the budget committee, we had o.m.b. acting director vote -- vought come and talk about it. it claims to reduce the debt as a percent of g.d.p. to 71% by 2029. however, according to a nonpartisan committee for responsible federal budget, without the growth assumptions in the budget, it would show debt reaching roughly 87% of the g.d.p. by 2029, or adding $2.2 trillion to the budget, that's more than the budget claims.
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do you have any -- does the administration have any independent or nonpartisan estimates of your policies that justify the 3% growth rate? mr. mnuchin: so the 3% growth rate is done by the combination of the council of economic advisors. our economics group and o.m.b. but let me just comment. we look at 10-year budgets, i encourage we were not making a 10-year commitment on spending. and i do think the right way to look at debt is a percentage of relative to g.d.p. and i encourage congress to look at, over the next 10 years, if we have the growth, we'll spend the money. if we don't have the type of growth, congress doesn't have to make the commitment to spend the money. mr. panetta: thank you, mr. secretary. thank you, mr. chairman. mr. neal: i thank the gentleman. with that, let me recognize the gentleman from texas, mr. arrington, to inquire. mr. arrington: thank you, mr. chairman. thank you, mr. secretary, for your leadership, thank you for working with us to put
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pro-growth, free market, pro-ag, pro-energy, pro-small business, pro-american worker policies in place and they're working. they're working because our job creator in chief, like many of us, believe that if you get off the backs and out of the way of our entrepreneurs, our innovators, our job creators, they'll do the work, they'll create growth. jobs are up, wages are up. the performance is really unprecedented. this is an economic renaissance. this is a great american comeback and i'm so proud to be a part of it. not only are those things up that i mentioned, but the american spirit is up. there's hope. for a better future. and i can tell you this, in rural america, they feel like their best days are yet to come. now, now that we've taken off the shackles of high taxes and regulations. these are working families. middle class families. farmers and ranchers and
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community banks and rural hospitals. these are the guys that bear a disproportionate brunt of big government. and now there's hope. let me give you some examples. happy state bank. little community relationship bank, the employees are happier than they've ever been. $1 million distributed in pay increases and bonuses for nonexecutives. 40 of their employees have had an increase of 50%. mike lambert, my buddy who runs feed and fangs, he has now been able to give guaranteed benefits to three of his full-time and four of his part-time workers. and he said he's got 100 new customers in the first quarter of 2018 compared to 2017. he said, please tell ms. pelosi, those aren't crums to us out here. then there's the gal from post, texas. she was facing, unfortunately, because her parents died this last year, both in one year, she
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had a ranch that was in the family since 1900. they worked hard, they paid their taxes, they played by the rules, and she was facing millions of dollars in the most unfair, most un-american double tax in the death tax. but because of tax reform, mr. ranking member, thank you for your leadership, she wasn't having to be forced because of government policies to sell that ranch. this is what she said. she said, people in d.c. have no idea how hard we work. we wake up at the crack of dawn to feed cattle, that's no glamorous job. especially to do it alone as a single female, these taxes ruin families. and their long-lasting memories working on the farm together. i've heard people say this is a sugar high, mr. secretary. is this a sugar high? sore this just a strong response tsh or -- or is this just a stong response from a stronger -- strong response from a healthier market? mr. mnuchin: i don't believe it's a huger -- sugar high. mr. neal: i thank the gentleman.
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with, that let me recognize the gentlelady from florida, mrs. murphy, to inquire. mrs. murphy: thank you, mr. chairman. mr. secretary when it comes to fiscal discipline -- mr. secretary, when it comes to fiscal discipline, the hypocrisy in the administration's budget is almost too much to bear. the president says the budget builds on the tremendous progress yeeve ed -- we've made to bring federal spending and debt under control and we must protect the future generations from washington's habitual deficit spending. i co-chair the blue dog democrats and we've been urging fiscal discipline out of both parties because the threat that excessive debt pose to our economy, our security and our children's future. yesterday yeth in 2017 the republican congress -- yet in 2017 the republican congress passed ant the president signed a tax law that c.b.o. projected wine crease deficit by $1.5 trillion over the next decade. on the side note, the affordable care act was projected to reduce deficits by $143 billion over the decade. i put a chart up on the screen
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but i'm sure you're familiar with this. it basically summarizes our fiscal situation and what i see when i look at this chart is deficits rising. hitting $1 trillion by 2022. these are c.b.o.'s projections. yours are even worse. projecting $1 trillion of deficit during the current fiscal year. and you said in response to a previous question, that we should look at debt as a percentage of g.d.p. and when i look at debt as a percentage of g.d.p. here, i see it rising there as well. that percentage is projected to 80% by 2022. the highest percentage since 1948. so my question to you is this. can you explain to me where anywhere on this chart you see evidence of the tremendous progress in bringing debt under control that president trump cited? point to just a single number or a trend that you think is positive and please don't pivot to g.d.p. i want too err -- to hear about deficits and debt. mr. mnuchin: first of all, i think i can see the chart.
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although it's a little bit far. first, let me just comment, i do think on a bipartisan basis this is something that people should be looking at. so i appreciate your concerns. as debt as a percent of g.d.p., and what we look at the debt over time. i would just comment on a couple of things. first of all, you see on the upper part of the chart where the deficit is a percent of g.d.p., if i can see this as kind of in the 7%, 8%, 9%, 10% type of range which is quite concerning. i would also highlight in 2017 a major reason for the deficit in 2017 was the fact that congress passed a very large spending increase, which i think, as you know, the president felt like we needed to make an investment in military and the democrats required us to have a big increase in nonmilitary spending. but really the tax bill has really not had a material impact
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on these numbers on the chart. as i said, it will over the next 10 years, one way or another. but i would just encourage people on a bipartisan basis to look at the spending issue. mrs. murphy: thank you. i yield back. mr. neal: i thank the gentlelady. with, that let me recognize -- with that, let me recognize the gentleman from nevada to inquire. mr. horsford: thank you very much, chairman neal. and to the ranking member, mr. secretary, it's good to have you here today. i'm very honored to serve on this committee and as one of the members also on the budget committee. so i have a perspective to see the proposal from the president, from both committees. and there are a number of discrepancies and really flat-out contradictions in both areas in my view. and i'd like to ask a couple of areas. for example, the fantasy economic projection for growth. the fact that we say that there's no impacts to
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pre-existing conditions when it specifically eliminates access to care. the president in his state of the union address talked about a eradicating hiv-aids, but yet it cuts $1.2 billion to the centers for disease control and n.i.h. another area is infrastructure. i know you answered the chairman's question about what you feel like the level of funding should be around infrastructure at the $1.5 trillion level. however, the president's budget called for only $200 billion investment for infrastructure, which is inadequate to cover the nation's infrastructure needs. and in a study of contradictions, i understand other parts of the budget make cuts as well. such as cuts to the highway trust fund after 2021, approximately $150 billion.
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so i guess my overall question specifically around infrastructure is, is the $200 billion net of cuts, or is it new money? where does this money come from and where is it going and has the administration prioritized infrastructure investments in its budget? mr. mnuchin: let me comment on the $1.5 trillion which we very much support for infrastructure. but i want to be clear, that doesn't have to be all federal spending. that can be a combination of various different things. we look forward to working with congress on infrastructure. obviously how it's paid for is a major component. so we didn't put bigger numbers on infrastructure in the budget, because this is something we know that needs bipartisan consensus. mr. horsford: in the areas where the president is speaking in one way, that he's preserving and protecting while making cuts to medicare, medicaid, snap assistance, food assistance for
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children, and needy seniors. mr. mnuchin: i would just comment, the overall budget is going up considerably over time. the president, and we look -- the president and we look forward to work with congress on how that money is allocated to different programs. the president is not cutting these programs on an absolute basis, but in many cases is lowering the rate of growth of expense. mr. horsford: thank you, mr. chairman. i yield back. mr. neal: i thank the gentleman. with, that let me recognize the gentleman from kansas, mr. estes, to inquire. ms. esty: thank you, mr. chairman. andu -- mr. estes: thank you, mr. chairman. and thank you, mr. secretary, for joining us today. i'd like to submit for the record an article entitled wages rising, the u.s. economy is now working best for lower wage workers, where it talks about wage growth has picked up sharply for the bottom half of he wage scale. mr. neal: without objection. streststrest as you mentioned in your testimony -- mr. estes: as you mentioned in your testimony, the economy is
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growing at historic levels. highest g.d.p. in 14 years. we've seen wages grow, we've seen unemployment rates near a 50-year low. we have more job openings than job seekers. and following that progress over the last few years, to jump-start the economy, you know, all of the regulatory reform and all of the tax cuts and jobs act benefit, we can't deny that those changes are making benefits for millions of americans. and the growth really helps the country. some of the things we need to keep moving forward. i represent witch tark the air capital of the world -- wichita, the air capital of the world. obviously trade is a big issue fours. both from an aviation standpoint but also from agriculture as well. i'm hopeful that congress moves forward quickly with the usmca and rat fice that because it's such a boone for not just -- ratifies that because it's not just -- it's such a boone for not just our country but countries around the world to see a strong economy in north america. as we continue that progress, i
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want to make sure we have the opportunity to move forward with china and other countries and other regions to make sure we have good trade agreements with them as well. another area we need to address is our deficit and our debt. and like many people in this committee, i ran because i'm concerned about that. i want to make sure we leave the country better off for our children and grandchildren. i want to thank you for addressing that on the president's behalf with this budget and some of the folks, some of the focus that you're puing on making sure that moves -- putting on making sure that moves forward and i'm hopeful the combined effort we're making sure we're doing appropriate government spending, that we can help achieve that goal. there is one quick question i want to talk about. we've seen some recent proposals, particularly coming from france, about taxing particularly technology companies. companies like amazon and apple and google and facebook, who have really used new technology to provide great innovation for our country and for the world. how's the best approach that we kind of attack that misguided
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approach? is it a direct contact with a country like france, or is it more multilateral with the e.u.? mr. mnuchin: so let me just comment. i was in europe last week. i had the opportunity to meet with the finance minister, bruno lamar, as well as president macron. this is one of the issues i brought up. it's also an issue in the u.k.. i had the opportunity to speak to phillip hammond about that. the chancellor there. we have been discussing this at the g-7 and we've made it very clear that digital taxes aimed at u.s. companies are unfair and we won't put up with that. we are working very closely at the o.e. -- oecd with them and others and i'm hopeful we can come up with a g-7 view that can then be moved through the rest of the world. so i'm cautiously optimistic. we need a combined solution on that.
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mr. neal: i thank the gentleman. with, that the gentleman from michigan, mr. kildee, is recognized to inquire. i'm sorry. mr. -- mr. kildee, would you go ahead and we'll come back to mr. gomez? please. i recognized you first. mr. kildee: thank you, mr. chairman. and thank you, secretary mnuchin, for being here. i represent a string of older industrial communities in michigan, saginaw, michigan, bay city, michigan. my hometown of flint. these are communities that have been significantly negatively affected by long-term economic trends, particularly by trade policy that is really expedited the offshoring of manufacturing jobs. because of that they are communities that are unfortunately uniquely not in a position to take full advantage of even significant infrastructure investment, unless there's a recognition of the particular needs that they face. so i was really troubled by what feels like an infrastructure
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plan that disproportionately puts the burden of that investment on state and local governments. i don't know what the particular plans for the $1.5 trillion investment would be, but it was not a good signal with the initial plan that we saw that 80% of the money would have to come from those states and local governments. which to be honest with you, mr. secretary, if they have had the 80%, they would be spending it right now. there has to be significantly more investment. so the one thing, before i ask another question that i would ask, is if the administration would be willing to work with those of us who represent those, particularly distressed communities, to make sure the unique needs are comprehended as an infrastructure plan goes forward, and not simply take the position that one size fits all, even if we got together around a more rational apportionment of the investment, even in that circumstance communities with really limited capacity and very
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little excess capital are going to be able to take advantage of this. i would just ask that you make a commitment to work with some of us who represent those particularly distressed communities. mr. mnuchin: i will. let me just comment. i had the opportunity to visit flint, michigan, during the campaign, with the president. i must say, i appreciate personally seeing it and the difficulties in that community and we look forward to working with you. again, i look forward to working with chairman neal and the rest of the committee on a bipartisan basis. whether he sit down and listen to your views and try to get a combination of the administration, the house and the senate on a bipartisan basis , try to pass legislation this year. mr. kildee: i appreciate that. i would ask that the president answer my letter and designate someone to work with me on flint's recovery. the only person he ever mentioned was our point of contact, was amorosa and she left about a day after that appointment was made. if i could just make one final
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point. the notion that tax cuts create growth and then reduce the deficit is one that i understand. but i would suggest that, particularly investments also can have the affect of reducing the deficit. i think it's unconscionable that this budget would reduce national institutes of health research into cancer research, for example, when the cure to these debilitating diseases would not only have a moral value, but could potentially reduce health care costs into the future. and i'd ask you look at that. i yield back. mr. mnuchin: i thank the gentleman. if you could send my office a coppy of the letter that you sent to the president, i'll personally speak to him and make sure is it got to him and we have someone in the white house that can work with you on that. again, i know he personally appreciates that community and what they've gone through. mr. neal: let me recognize the gentleman from california, mr. gomez, to inquire. mr. gohmert: thank you, mr. chairman -- mr. gomez: thank you, mr. chairman. mr. secretary, thank you for being here. i'm going to go back to a line of questioning from earlier.
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in 2017, there were 151 million disclosures of tax records under section 6103-f. mr. serks you have ever denied a request for tax records under 6103-f by the ways and means committee or the senate finance committee? mr. mnuchin: i think i understand what people are trying to get me to address. but again, let me just say, that the use of 6103, and i believe it's $9 bfl disclosures, not $11 billion, has to do with sharing of information, whether it's th states, whether it's with the department of education. this is a bulk issue. this is different than what i read about in the press, is the committee chair requesting any specific individual tax return, which, again, i'm not aware of that having been done in the
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past, especially on an elected official. mr. gomez: so there has never been a request denied? mr. mnuchin: i'm not going answer that because i don't know whether there's been a request denied or not. but equating -- mr. gomez: ok -- mr. mnuchin: the $ billion of disclosures -- $9 billion on disclosures -- [talking simultaneously] mr. gomez: i'm reclaiming my time because i'm running out of time. has president trump ever asked you to intervene or ignore the coming requests for his tax returns? mr. mnuchin: he has not. mr. gomez: you have ever discussed the topic of president trump's tax returns with the president or anyone in the white house? mr. mnuchin: i have not discussed with anybody in the white house the issue of his tax returns or a quf his tax return. -- request of his tax return. mr. gomez: anybody outside of the white house? mr. mnuchin: i'm not at liberty to make comments on people outside of the white house i discuss things with one way or
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another. mr. gomez: so you might is have discussed this with his attorneys? mr. mnuchin: i've in no discussions with his attorneys. but i'm not continuing to go down this -- again, of you asking me 20 questions on this. mr. gomez: that's what we do here. we ask questions. i at least ask questions. mr. mnuchin: actually, all due respect. i take that back. you can ask the questions and i will try to answer them, but -- mr. gomez: thank you, i appreciate that. mr. mnuchin: keep going. mr. gomez: thank you. i appreciate your responses. mr. chairman, i yield back. mr. neal: i thank the gentleman. with that let me recognize the gentleman from california, mr. nunes, to inquire. nunesnunes thank you, mr. chairman. secretary, -- mr. nunes: thank you, mr. chairman. mr. secretary, thank you for being here. i don't think anyone's talked about the pending agreement with united states, mexico and canada. the administration has completed that agreement. where do we stand now in terms of getting that agreement approved by congress? mr. mnuchin: thank you for bringing that up. i think this is one of the most important economic issues that
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is on the table. this agreement is a big step in the right direction that protects everything from workers to farmers to intellectual property, to currency. this is the strongest currency provisions. i know that ambassador lighthizer has been up here. i would urge congress, i see no reason why this congress cannot take this up quickly. so i would urge the chairman, working with the leader and others, to bring this to the floor as quickly as possible. the sooner that this is passed, the better this will be for the u.s. economy and i can tell you from having been at a bipartisan meeting of governors at the white house recently, there is enormous support from the governors on this legislation. so i look forward to the chairman working with ambassador lighthizer and others on this. >> thank you, mr. secretary.
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as you know, nafta was outdated. needs to be updated. as far as i can tell from the agreement, many sectors of the economy will have dramatically improved trade capability with mexico, with canada so, we can export more of our products, especially agricultural products, to both canada and mexico. . is that correct? . secretary mnuchin: this is important for our farmers for selling things in canada and mexico and i urge congress to take this up as soon as possible. mr. nunes: i hope we can get it done sooner rather than later. a lot of discussion about your budget and you are up here talking about the administration's budget. have you compared that yet to the house budget, house of representatives' budget? secretary mnuchin: i haven't done a line-by-line basis.
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mr. nunes: it's a trick question. the house of representatives doesn't have a budget yet. from what i understand is that the majority is not going to have a budget this year. budgets are oftentimes never followed but at least it is a pathway for what the administration believes is the appropriate approach for budgeting over the next 15 years. house of representatives should have a budget also. secretary mnuchin: i commend the house on the new rules associated with the debt ceiling on the budget in the house. if they can pass a clean debt ceiling quickly. mr. neal: the chair is prepared to acknowledge that there are trick questions that take place here. with that, let me recognize the gentleman from connecticut. mr. larson: there will be no trick question here and thank
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you for your time you have afforded us and look forward to coming back in further exchange as well and whether it's in the form of a briefing or otherwise, your continued emphasis on bipartisanship is welcomed here. noting what chairman neal said before, the pension reform and the timeliness. also you again repeated and i thank mr. nunes to get a clean vote on the debt ceiling and get that taken care of so we don't nd up in a pro tacted stall. what you said on infrastructure in your exchange with mr. blumenauer is extraordinarily helpful. at you see here is the bug that democrats have based on the juxtaposition $2 trillion tax
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cut and looking at a budget that cuts to the heart of medicare and medicaid. ere the rug is here, those oftentimes, medicare and social security being labeled entitlements. they are the insurance that people have paid for. give president trump credit, 16 other republicans on the staming tried to corner him and said no, it is a benefit they earned and i will not cut it. that's the further rug that people on our side have. we look and our subcommittee is working hard to further achieve these goals. so i appreciate what you had to say there. and i would point out in 1983, last time we did anything constructive with social security, ronald reagan was the president. tip o'neill was speaker. howard baker was the senate
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majority leader. it's not different today with nancy pelosi and also with mitch mcconnell except this. ronald reagan was opposed to social security. president trump has defended this and it's something that the administration i think should take credit for and bork bipartisanly because i think you can bring along many moderate republicans that believe as the president does that these are not entitlements and we need to reform these in a way to take care of those american people who solely relied on this because they know it's the full faith and credit of the united states government. i thank you for your service. and i hope you'll pass that message along to the president and we can continue to work with you. secretary mnuchin: i will. and thank you very much. as trustee of the social security trust fund, i take this responsibility seriously and i look forward to meeting with you
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and other members of the committee to get your ideas. we'll try to follow up and schedule that. r. larson: thanks. mr. neal: i recognize the gentleman from pennsylvania, mr. boyle. boil boil i wanted to follow up the very beginning chairman neal asked you about the debt ceiling and i was happy to hear you say you are supportive of a clean raise and follow up on that and go to the next step. the concept of the debt ceiling and the constant crisis it creates through repeated threats of not being raised is completely unnecessary and achieves nothing in my view. no wonder that a handful countries follow this disruptive, arbitrary and fiscal crisis. when you receive your credit card at the end of the month you can't decide i will pay this but
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won't pay that. and we came most close up to the brink in 2011 but other subsequent times, our constant process of playing chicken with the debt ceiling achieves nothing and god forbid one day, we might risk the full faith and credit of the united states. so last congress, i introduced 3693 that would simply and cleanly abolish the debt ceiling once and for all. what was your opinion on whether my specific legislation or just the concept of eliminating the debt ceiling all together and not having that potential danger lurking out there. secretary mnuchin: i share your concern about going to the brinksmanship and risking the
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credit of the u.s. government. this is something we can never let occur. i'm not familiar with the specific legislation. i will look at it. my own opinion is that when we approve spending, we should approve raising the debt ceiling. i'm not sure we need to get rid of it, but like any other business, when you approve spending, you have a plan how to finance that spending. if we want to cut spending, we should cut spending, but that is the time to deal with it. we should make sure if we approve funding, we approve spengeding, approve the necessary funding as well. boil boil i'm in agreement, in 2011, even though we raised the debt ceiling, the fact that we came close and led to the uncertainty in the markets led to the downgrade of the credit of the united states. briefly in the time remaining, could you describe some of the
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things that would happen given your role as secretary of treasury, if we were ever to fail or future congress, if we fail to raise the debt ceiling. secretary mnuchin: i can't believe this congress or other congresses would let the government would fail. honoring the full faith and credit of the united states government is one of the most important issues and as treasury secretary, i will do everything that we honor the full faith and credit. boil boil i yield back. mr. neal: i appreciate the gentleman for that line of inquiry as well. thank you for your participation. members have two weeks to submit written questions. those questions and answers will be made part of the formal hearing record. with that, the committee stands adjourned. [captions copyright national cable satellite corp. 2019]
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>> the senate voted 59-41 to terminate president trump's
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emergency declaration. the resolution goes to the president who promises to veto it. neither now the house or the senate have enough votes to override a presidential veto. >> the only thing we have to fear is fear itself. >> ask not what your country can do for you, ask what you can do for your country. >> and the people who knock these buildings down -- >> c-span's newest book, presidents, rated historians rate. provides insight into the lives of the 44 american presidents, true stories granted by presidents. explore the life events that shaped our leaders, challenges
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